Last week there was some very HUGE news in the mortgage industry with the U.S. Government bailing out both Fannie Mae & Freddie Mac as they were facing financial issues in today’s hurting mortgage industry.

Short Term - This was a must for the mortgage industry. If the government wouldn’t have stepped in and bailed out these two giants, what could have happened otherwise would have been catastrophic. High fives should be going around the house with this news. This is going to give our conforming industry back the stability it needs to continue funding loans and driving in new business. I wouldn’t be surprised if we see a drop in interest rates down to the 5.500% range and rally back and forth for some time because of this huge take over.

Folks, please also note that this is not the end of the mortgage crisis. All this is really going to do is allow us to still continue to move forward with the same crisis we were already facing in our mortgage and economic economy. Why is this good news then? Because if what could have happened if the government would not have bailed these giants out would of destroyed or us. Imagine for just a bit if the conforming lending had just the same if not worse restrictions on it as the jumbo loans do now. This could have and would of shut us down and caused worldwide effects.

So Short term, this is great news because we can continue to move forward. What we have to keep our eye on is the long term effects. There are still major companies in economic shambles and the government can’t help them all out. What will happen to these companies, and how will that continue to affect our economy?

Regards,

Fred D. Williams, Jr.
Mortgage Advisor
Mid Valley Financial Service
(559) 256-3645

Are you currently in the process of looking to purchase a home for the 1st time? Do you have clients that may be struggling to come up with the down payment to purchase a home? If so, you need to be aware of one of the many benefits that will take effect due to the H.R. 3221 Bill that was singed by President Bush on July 30, 2008.

Within the H.R. 3221 Bill there is a provision that allows first time home buyers to have up to $7,500 as a tax credit for purchasing a house. The max is $7,500 or 10% of the purchase price, which ever is less. So as long as you have a purchase price over $75,000 your tax credit will be $7,500. This $7,500 tax credit is looked at as a loan and will need to be paid back over a period of 5 years. The exciting part is it is less than $42 a day and it is interest free money.

There are income restrictions on this money if you are single or married. If you are single you will not qualify for the full $7,500 if you make more than $75,000 a year. If you are married your combined income can not exceed $150,000. If for any reason your income does exceed these amounts when filed, your tax credit will be reduced from the full possible amount of $7,500.

You will need to pay your tax credit back in full if you decide to rent out the property while you still owe on your tax credit. They only way to get out of not paying this money back is if your number expires and you were to pass way.

Take advantage of your tax credit today by getting a loan from a family member! If you can’t wait until tax time to get your tax credit Perhaps a family member would be willing to gift you a down payment for your purchase today (with possible interest) and pay them back in full once the tax credit is recieved at tax time. If this is a plan that they decide to go with, please make sure to talk to a CPA who has possibly filed there taxes in the past. If they are an individual that usually has to pay on there taxes, they better be prepared to not get the entire $7,500 tax credit or what ever is due to them (Uncle Sam gets his slice of the cake before anyone). So if you were to file your taxes in 08′ and it turns out that you owe $1,500 and you were also expecting a tax credit  of $7,500. Your amount due to you will drop to $6,000. 

So if you are going to borrow from a family member with the anticipation to pay back at tax time, be sure that you know where you stand with your CPA.

I hope that this has shed some light on the new tax credit that is coming our way from the H.R. 3221 bill. 

Regards,

Fred D. Williams, Jr
Mortgage Advisor
Mid Valley Financial Services

What is your Las Vegas Home to you? To some it’s a place to put your head at night. To others it’s a place to relax and put your feet up after a long days work. We can all agree that your home plays several functions in our busy everyday lives. Remodeling your home can enhance the visual impact of your environment as a homeowner. It can also increase the resale value of your home as well as improve energy efficiency (by investing in new appliances and such).

Is remodeling your home easy? Some people may say yes because they may have the experience, the equipment, and the assets to do so. What if you don’t have the time? What if you are not mechanically inclined and you have to have someone do it for you?

Remodeling can be a very hard time for the homeowner. It can be a big time investment and it might create the headache of living in a middle of the construction project. Why not start with simple remodeling. Painting and changing light fixtures is an example on how you can modernize your home by enhancing the appearance. Color coordinating your towels, putting matching toiletry holders by your sinks, and changing your shower curtain is an easy way to change the overall theme of your bathroom. Investing in new appliances in your kitchen and coordinating a theme to it can brighten your atmosphere to the most visited room in the home. If you are into the latest fashion and trends of the kitchen this would be a very fun project for everyone in the household to enjoy.

Some of those little tips are just a few ways to making remodeling simple. By remodeling your home; you can change the aspect of your life in a direction where it can make you happier and comfortable.

After many months or maybe years, you have finally decided to buy your own home. You have pinched every penny to save up a sizeable down payment. You have made open houses a weekend ritual but still can’t seem to make the leap into purchasing a home. Why not??

Maybe you’re comfortable in your current space. You have accepted the shortcomings of where you live whether it is loud neighbors or no parking readily available. Not many surprises since you have been there so long.

First time home buyers tend to freeze up when it comes time to actually picking a house. Will they be happy there? Will they like their neighbors? Will they be tied down because they are now house rich and cash poor? What happens if their financial situation changes for the worse? Basically, the fear of the unknown becomes a constant nagging in their ear and prevents them from moving on towards purchasing their dream home.

Here are some steps to try and then maybe you can take the leap to homeownership:

• Get comfortable with your finances: Make sure you sit down and go over all of your current finances and the new ones that will occur with home ownership. Things like property taxes, home owners insurance, commuting to work and cost of utilities should be factored into your monthly expenses to make sure you are buying within your limit.
• Partner with a Realtor: You need to pair up with a knowledgeable realtor. Even though the internet will allow you to do lots of research on your own, you can’t get the low down on a property without help from a realtor. They will be able to answer questions you will have and give you the inside scoop on the property. They will also help you write an offer and make sure you get a good deal.
• Accept some risk: There is uncertainty in everything about life, you just need to deal with it. Learn from people you know that have purchased a home. Find out their mistakes and what to look for. Make sure you don’t drain your bank account with purchasing the home, keep a safety net in case of emergency.
• Fine tune your “must-haves”: Make your list of “must haves” in your new home. A garage, the neighborhood, size and layout of the home, and anything else you feel is important and that you can’t live without. You may find that you are willing to sacrifice one feature, if the rest is fabulous. If you are not crazy about the house, don’t bid. It is important you love the home you are bidding on, after all you will be living there for some time.
• Be ready to bid: Great homes and prices don’t stay around for long. If you love the home, have your realtor help you make an appropriate bid. If you are wavering, ask yourself, “How will I feel if I don’t get this house?” You might just get it, and if not, at least you’ll you know you tried.
• Find an experienced Mortgage Professional: Sit down with an experienced mortgage professional and have them help you analyze your options for financing your new home. Finding the right mortgage can be as important as finding the right home. Make sure you clearly understand what type of mortgage you are getting. Ask as many questions as you need too until you are absolutely clear on the type of financing you are applying for. Remember, you are the one paying back the mortgage.

I hope this pushes all of you “on the fence” home buyers “off the fence” and into the home of your dreams. Happy House Hunting!!!!

By Shelli Crysler

Fuel prices skyrocketing out of control. Heaven forbid you own a diesel which is now pushing $5 per gallon. The floods in the Midwest are impacting our food supply which in turn is costing us more money. The salmonella scare of fresh tomatoes in threatening a shortage. And now the mortgage interest rates are on the climb as well, joining the long list of things that are becoming more expensive.

According to Bankrate.com which is a national survey of large lenders, the 30 year fixed rate rose 26 basis points. A basis point is 100th of 1 percentage point. One year ago the mortgage index was 6.84%, 4 weeks ago it was 6.19% and today it is 6.52%. The 15 year fixed jumped a dramatic 28 basis points to 6.12% and the 30 year jumbo rose 13 basis points to 7.6%. Even the adjustable rate mortgages have taken a hit, the 5/1adjustable rate went up 27 basis points to 6.07%. UNBELIEVABLE!!!

This is the biggest increase for the 30 year fixed mortgage rate since Feb 20th when it rose 41 basis points. According to a weekly survey by Bankrate, the 30 year fixes has jumped up more then 25 basis points 7 times in the last 10 years with 3 of those 7 instances being in 2008. Not a good trend for ‘08.

Need some consolation right now? The rates were substantially higher a year ago. However, last years high rates were due to the hot stock market which drew investors away from bonds. This caused the bond yields to rise followed closely by the mortgages rates. This year is a whole different story. The rates are rising in response to inflation fears and concerns about credit quality.

Even though the rates are on the rise and prices are steadily going up on many consumer goods, it looks like some areas in the country have less expensive housing then others. According to the Beige Book home prices are down in New England, Florida and California. The NAR (National Association of Realtors) reported this week that its index of pending home sales were up in April. This signals a possible increase in home sales in the last half of the year. Keep your fingers crossed.

“Sharp price reductions are leading to a quicker discovery of price equilibrium points,” the Realtors’ chief economist, Lawrence Yun, says.

According to some analysts this translates into the foreclosure issue out West cutting into home prices in parts of the country.

Right before the increase in mortgage rates this week, the president of the National Association of Realtors, Richard Gaylord, said: “Overall affordability conditions are the best we’ve seen since the middle of the housing boom in 2004, but with far more choices and much less pressure than buyers experienced four years ago to make an investment in their future.”

The question is “has some of the affordability been lost now that the mortgage rates have climbed a quarter of a percentage point?” I would say yes.

By Shelli Crysler

You would think Trulia is there to help local real estate agents grow their business by giving them cool tools and widgets!  But that is just not the case.  Trulia is your competitor no matter which way you look at it.  Let’s look at my local market, Las Vegas Real Estate on Google.  Trulia ranks in the top 10 and ironically I am #11 which is on page 2!  So by placing these widgets and tools on my website, I am in fact helping my competitor by placing one way links to them.  We all know that Trulia has “no follow” attributes on their website, so they are not sharing any link juice to their so called “trusted partners”!

So needless to say, I have no Trulia widgets on my website and I encourage all real estate agents to remove any and all Trulia widgets or banners from their website.  It’s hard enough competing with other local real estate professionals but now you have to worry about a free national website that has a spending budget of millions!  Stop competing against yourself and do not link to Trulia!

Anyone that is paying any attention to the economy knows that the real estate market is in a slump all across the United States.  But the question remains, whose to blame?  Some say it is Wall Street for creating these investment portfolios for the banks and lenders.  Some say it’s the banks and lenders allowing anyone with a social security number to get qualified for a home loan that they could not afford.  Some say it’s the loan officers who pushed their clients into these loan programs only to line their pockets with more money.

But when you think about it, there has to be more to it?

I do believe that many of the above mentioned contributed to the real estate crash, but I also believe that the Media played even a bigger role!  Back in 2004 when the real estate market was taking off, it was the media that informed the public how hot the real estate market was and how investors are flocking to hot markets to make a buck.  That’s like telling a child, there is candy on the top shelf, you know the child is going to do whatever it takes to get the candy.  So now you have the media informing the public about the hot market and how investors are making money, so now you have uneducated so called investors buying “investment properties”.  They don’t want to be left behind, Harvey down the street is buying investment properties!

Fast forward a few years later and the media begins to inform the public that the real estate markets aren’t doing as well, now lenders are filing bankruptcy because they can’t get Wall Street to buy their portfolios.  Poeple are panicking, what are they going to do?  People that would normally be buying their first home or a second home are now hesitant because of everything they are seeing and reading on TV and newspapers.

So next time you hear of someone that lost their home to foreclosure and you think, “man they got screwed by their lender”, take a second to think how the media played a role!